Friends of Branded!
Happy Saturday and I hope everyone had a great week.
Branded and I have been accused of many things as we continue our journey to be the leading early-stage investment & solutions platform for technology, innovation, and now emerging brands in the hospitality & foodservice industry.
- Branded is too narrowly focused, b/c we exclusively focus on the hospitality and foodservice industry.
- Branded is too unfocused, b/c in addition to our fund management platform and co-direct opportunities, we also offer robust advisory services to support restaurants and technology companies “go to market” strategies, capital markets services to support our emerging companies as they move along on their own journey and their need to secure later-stage investment partners, a marketing & media effort that includes this newsletter (Hospitality Headline) and our long-running podcast (Hospitality Hangout); and our commitment to attending in-person and specifically industry events (the work we’ve done specifically with our friends & partners at Winsight and Prosper Forum are admittedly heavy lifts for Team Branded, but we love that these industry leaders allow us to be part of their shows and hopefully add value to the great work they are doing for this industry we love).
- These weekend newsletters and specifically my Top of the Fold section is entirely too long! Actually, there’s little debate on this one, so while I continue to work on this, I’ll simply own this piece of constructive feedback. 😊
I welcome and embrace all constructive feedback, so to the many people that have provided me with comments, I thank you and appreciate you. To those that might have thoughts, but figure what’s the point in sharing them with me, I can commit that I NEVER shoot messengers and I always welcome feedback. My learning curve is steep, and I never want it to be flat.
All of this is somewhat of a preamble to a new industry event Schatz, Noah Stern and I attended this week in NYC (ACG NYC Middle Market Week) and a placeholder to a new event Schatz attended earlier this week out in Scottsdale, AZ (IFMA Presidents Conference). To be crystal clear, these were new events for Team Branded, but these have been industry benchmarks for years.
The subject for this week’s Top of the Fold was inspired yesterday by one of the many meetings I had at the ACG event. I was asked by a new friend I met at Table #3 in the Open Seating area, “I read you bio and spent some time on your website, why are you here?”
First, a little bit about ACG and the event. Founded in 1954, the Association for Corporate Growth (“ACG”) has chapters worldwide representing 14,500 members. ACG serves 90,000 investors, executives, lenders, and advisors to growing middle-market companies.
ACG’s mission is to drive middle-market growth, and if yesterday was any indication on how they run events, I want more ACG!!! From the moment we entered Tavern on the Green to moment the bartender said, “no sir, last call was 10 minutes ago,” (I’m kidding, the bartender gave me a roadie), the event was masterfully done. Yesterday might have been ACG’s 19th Wine Tasting Gala and Branded’s 1st, but we’ll be part of this event going forward and for years to come!
Now with the introduction to ACG provided above, let’s go back to the question I was asked, why was Branded, an early-stage investor, spending the day at the ACG middle-market event?
I loved the question and appreciated it b/c while I thought it was obvious why Branded was attending, it was clearly less so to the folks we were meeting (and thanks to my having Schatz and Noah with me, we had 23 one-on-one meetings in a single day).
Of course, when we attend events, I have a primary objective of introducing our investment platform and specifically the funds and opportunities we’re in the market with. That’s table stakes for any event, to make sure the folks we’re meeting with know if we’re raising capital for our diversified funds. And as long as I have you attention, and afterclosing our BHV-I and BHV-II, if you like to explore Branded’s diversified fund platform, Accredited Investors and Qualified Purchasers can click the link below to learn more about our current activities or you can contact me directly.
For this event, while raising capital might have been priority #1, there was a clear and identified priority #1a – and that was to act as an agent for the Branded portfolio companies that have grown exponentially since our investment was made and present them (and the inside baseball we have access to) as potential opportunities for the growth and later-stage investors that attended ACG.
Long-term readers of the H^2 know that I consider my work at Branded to be a cerebral sport and I use (too often) sports analogies as a result. The sport I lean on the most is baseball and that’s NOT b/c it’s my favorite or b/c of my specific talent in the sport. I played high school baseball and put up some pretty good numbers. I went onto Wesleyan University where I intended to continue my baseball career, but I had an unfortunate disagreement with the varsity coach. To be clear, I thought I was pretty good, the coach didn’t. I took my talents to the intramural softball fields. 😊
But back to baseball, the ONLY major US sport without a (real) salary cap. If you’re interested in learning more about the salary caps and specifically the difference each league uses to create parity and a competitive balance, here’s a link that might prove helpful: Professional Sports - Salary Caps
Major League Baseball uses what’s called a “luxury tax” and while my quick definition is admittedly incomplete, unlike, for example the National Football League, National Hockey League, National Basketball League, and Major League Soccer, if an MLB team wants to spend more, they’re free to do so and pay the associated tax.
In 2023, the NY Mets had the highest opening day payroll at $353.5mm. The Oakland A’s had the lowest opening day payroll of $56.9mm. And in the category of TMI, despite my being a native New Yorker and lifelong NY Yankees fan, I’ll root for Mr. Billy Beane and his A’s every year b/c of how he approaches and has essentially changed the game of baseball.
Sticking with the theme of MLB, a strong farm system or minor league team represents an important contributor to success for MLB teams. For teams in contention for a pennant, a strong farm system affords them fresh players. For those not in contention, it gives them an opportunity to evaluate their second-tier players against major-league competition. It’s really the rights to players and new-talent that is the value proposition for the Big-League teams.
As I spent time at the ACG middle-market event on Thursday, the topic of discussion at vast majority of my meetings were about the specific Branded portfolio companies that have achieved tremendous growth, meaningful increases in their enterprise value and strong metrics that position these portfolio companies wonderfully for growth equity investors. During this awesome event, I felt like a scout or maybe an agent speaking on behalf of several of Branded portfolio companies based on the needs and wants of these Private Equity Growth Equity Funds.
Specific to the hospitality space, some of these P/E firms love the front of house, some are focused on the back of house, some have very specific wants and needs based on their existing portfolios. With a portfolio of over 40 companies and a database over 1,000 segmented by Branded’s defined industry verticals and classifications, I won’t say we have this market perfectly covered, but when it comes to the most operator-centric and companies that will drive margin optimization for operators, I feel confident in our ballclub (portfolio) and the players (companies) that will be moving onto the Show (later-stage investors and / or being acquired)!
One thing that was glaringly clear, Branded’s boots-on-the-ground knowledge, and our active engagement with our portfolio companies, along with their respective position in the industry and the segments they serve, was valued by these P/E firms. Our knowledge of the industry and specifically the most pressing challenges, problems, and opportunities operators are focused on and the tech & innovation solutions available to address them was valued as well.
As I watch so many of our portfolio companies continue to access the capital markets, win business from some of the strongest restaurant brands across the globe, and be recognized as some of the most important tech and innovation companies that are helping operators in this most challenging industry and environment, I realize how much I LOVE working with emerging companies. Yes, they will graduate and move onto other later-stage and strategic investors who will take them further on their journey, but they will forever be part of our community.
And like any good farm system or minor league team, we will always be searching and scouring the market for the next Ebby Calvin 'Nuke' LaLoosh.
Thank you ACG New York for inviting us to be part of such a special event, for bringing us into your middle market community and for the hospitality you provided to all your guests at the 19th Annual Wine Tasting Gala!
It takes a village!
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According to the Society of Professional Journalists (the “SPJ”), journalists are cautioned to report the story and not to become part of it, but this is the Hospitality Headline and I’m not a journalist!
This week’s shoutout goes to Branded’s friends and now official strategic partners at Results Thru Strategy (“RTS”). We have had the privilege of getting to know and working with Chaos Strategist & Founder, Fred LeFranc; it’s Executive Technology Strategist, Christopher Sebes and several other amazing professionals on the RTS team. We’ve shared engagements, attended conferences together and continued to explore how we can better come together to leverage our respective platforms and deliver accretive value to the industry both Branded and RTS love.
This most strategic partnership has been in the works and as the industry gathers for one last event for 2023, the RFDC - Restaurant Finance & Development Conference, we’re excited to make this announcement.
I particularly enjoyed the post Schatzy made over LinkedIn and the comments that followed. The hospitality industry is an incredible community and I sincerely appreciate all the kind words regarding this partnership. Our expectations for what Branded and RTS will do together and for our companies & clients is exceptionally high, and we will exceed them!
Schatz’ LinkedIN post: Branded + Results Thru Strategy
Again, I’m sorry that I’m making myself part of the story here.
I met Mr. Hogan at the ACG New York Wine Gala and truth be told, it was the cowboy hat that caught my attention.
It’s not often that there’s another gentlemen wearing a hat at events like this (the baseball hat is kind of my thing). I was speaking with some folks when Mr. Hogan was pointed out to me, and I said I had to meet him.
Upon introducing myself, I learned about Bunker Labs, a nationwide not-for-profit 501(c)(3) Veteran Entrepreneur Service Organization (VSO) that provides community, programs, and courses to help veterans and military spouses launch and grow successful businesses.
I asked Blake if we could take a photo together and that’s the photo below on the left. Despite my position and role at Branded, the WITWIB committee rejected this photo from consideration on the grounds that Mr. Hogan was NOT in fact wearing a piece of Branded swag. Never one to accept a defeat without putting up a fight, yesterday I attended ACG New York’s Veterans Day Closing Luncheon in partnership with ACG NY Veterans in the Middle Market Committee along with Superyacht Holdings; 51vets; and Bunker Labs.
After the presentations were completed, I asked Blake if I could get him to take another picture, but this time with his wearing a Branded hat and my wearing his cowboy hat. Blake might be a large man, but I have a big head!
No doubt in the category of who wore it better, Blake wins that honor in both pictures. 😊
In all seriousness, Blake and the crew at Bunker Labs are doing great things with and for our veterans.
On a separate, but VERY much related topic, Crown Royal, the official whiskey sponsor of the CMA Awards and Country music star, Jordan Davis, raised a glass to Blake and Bunker Labs and delivered him the “That Deserves a Crown" award.
So, Mr. Hogan won two awards this week, one in Nashville and the other in NYC. The Nashville award came with a $50,000 donation to Bunker Labs and I’m sending Blake a bag of Branded swag, but also a commitment to engage with Bunker Labs and be part of their community. It takes a village.
To participate in the contest: Email email@example.com or contact your friend at Branded to submit a photo of yourself wearing a piece of Branded "swag" and let us know where in the world you are!
ACG MIDDLE MARKET WEEK
ACG NY's Middle Market Week will bring together leading global middle market dealmaking professionals to develop and enhance their dealmaking activities, strengthen their long-term relationships, and provide numerous opportunities for networking. Make sure you are in New York for this can’t miss week of non-stop deal opportunities November 6th through November 10th.’
Answer also revealed at the end of the newsletter
By: Mani Kulasooriya, Co-founder & CEO at Cut+Dry
In Silicon Valley's startup jungle, where faking it is an art, learn the dance! From Microsoft's Vaporware groove to Theranos' epic fail, as customer you should master some steps to avoid getting hoodwinked.
Digital Restaurant Association
We champion restaurants to thrive in a digital world
By: Seth Temko, Solutions Services Partner at Branded Hospitality Ventures
Nobody enjoys being sold to, but people have opinions and they're usually pretty happy to share. Learn how to harness a different approach to inform your business and improve your sales.
Serve Up Hope with CORE
Children of Restaurant Employees is a national non-profit and direct provider that is dedicated to serving food and beverage operations employees with children. CORE provides financial relief when the restaurant employee, their spouse, or child faces a life-altering medical crisis, injury, death, or natural disaster. To learn more about how CORE helps, and how you and your company can get involved, click the button below
By: Noah Stern, Associate, Branded Hospitality Venture
While consumers will continue to pay for food and beverage, the more restaurants increasing their prices, the less people are going to dine out. In the modern age of hospitality, technology is the necessary and logical solution.
Restaurant Industry Movers in the Market
—Data as of 11/10/23
MAXIMIZE VALUE, IMPROVE PERFORMANCE
Learn how the Hospitality Industry advisors from CohnReznick can put you at the forefront of advanced financial, operational, and risk management strategies.
IN THE NEWS
Hospitality Tech and F&B Innovation IN THE NEWS:
We love to highlight Food Service & Hospitality news, especially when it’s Partners & Friends making it!
- GoTab: GoTab Named 29th Fastest-Growing Company in North America on the 2023 Deloitte Technology Fast 500™
- MarginEdge: MarginEdge Recognized by Inc.’s Power Partner Awards and Washington Business Journal’s Fastest Growing Companies 2023
- Ovation: A Slice of Superior Customer Service With Deric Rosenbaum
- Vromo: 5 savvy ways to reinvest your leftover delivery budget
- Toast: Toast Says Specialized Digital Products Key to Securing Bigger Restaurant Market Share
- Cut + Dry:4 Years in the Making: Cut+Dry Launching the First-Ever AI Prospecting Tool for Foodservice Distributors to Increase Revenue and Customers
- Curbit: Smashbuger Partners with Curbit to Implement AI-Powered Order-Throttling
- Incentivio: How Menu Intelligence Can Boost Your Bottom Line
And in other News…please see some of the stories that caught our attention and that we’re paying attention to. This week was loaded with headlines and news!!
- Yahoo! Finance: Subway CEO on future: More growth for global, digital orders, and snacks
- Yahoo! Finance: Cava aims to forge a new path in fast casual, says CEO
- Food Business News: Kraft Heinz names president for North America
- Nation's Restaurant News: DoorDash ignites debate with warning of bad service for customers who don’t tip
- Restaurant Business Online: First venture beyond restaurants brings a new name for Greg Flynn's mega-franchise company
- CNBC: Ryman Hospitality CEO: Business levels have returned to pre-pandemic levels for room nights sold
- ZACKS: YELP Stock Soars as Q3 Earnings & Revenues Beat Estimates
- Fast Company: What the heck is going on with Sweetgreen?
- MarketWatch: El Pollo Loco CEO Laurance Roberts leaving the company
- CNBC: Food-delivery startup Wonder Group gets $100 million investment from Nestle
ANSWER: Sonic Drive-In
ASK THE HEADLINE
🔍 Got Questions? We've Got Answers! 🌟
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That’s it for today!
See you next week, (about the) same bat-time, same bat-channel.
It takes a village!
Branded Hospitality Ventures ("Branded") is an investment and advisory platform at the intersection of food service, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its portfolio companies through investment, strategic counsel, and its deep industry expertise and connections.
Learn more about Branded here: Branded At-A-Glance November 2023